On 10 October 2024, the UK Government published its Employment Rights Bill, which includes many of the measures previously set out in the Labour Party’s “Plan to Make Work Pay” which was mentioned in the King’s Speech. It proposes some wide-ranging changes in employment practices and law which will affect virtually all employers including small and medium-sized enterprises (SMEs).
The Bill includes a number of provisions, including the right to request flexible working (employers can still refuse these requests but only on certain specified grounds). There will be an obligation on employers to take all reasonable steps to prevent sexual harassment (previously the law required employers merely to take “reasonable steps”) as well as a broad duty for employers to prevent harassment of employees by third parties. The Government has also confirmed a number of other proposals concerning employment rights will be progressed alongside the Bill, including a right for employees to “switch off” outside their contracted working hours. Some of the other key proposals in the Bill are set out below.
Fire and Rehire
Employers may sometimes need to change contracts of employment, especially if the business needs to restructure to remain viable. If employees do not agree, the employer may dismiss them before offering to re-engage them in substantially the same role. This is referred to as ‘fire and rehire’. This an acceptable practice when there is genuinely no alternative, but the Bill aims to end unscrupulous ‘fire and rehire’ tactics, insisting on a proper process based on dialogue and common understanding between employers and employees. Employment terms and conditions negotiated in good faith cannot be undercut by the threat of dismissal.
Unfair Dismissal
Protection against unfair dismissal is to be available from day one of employment for all businesses. The Government has said that it is committed to consulting on this proposal and the current unfair dismissal regime will remain in place until at least Autumn 2026. However, scrapping the two-year qualifying period before an employee can claim unfair dismissal will require the employer to have a fair reason to dismiss the employee, no matter what their length of service. This proposal will of course have implications for probationary periods with the Government suggesting a preference for a nine-month statutory probation period.
Zero Hours Contracts
Employers will be required to periodically offer guaranteed hours to workers on zero hours contracts. Such an offer must reflect the working patterns the employee previously worked, and the terms proposed must be as favourable as those the employee previously enjoyed. The employee would be free to accept or decline the guaranteed hours. Employers will need to consider the structure of their workforce and whether the use of flexible labour is appropriate.
Sick Pay and Parental Leave
The Bill will allow employees to claim statutory sick pay from day one of their sickness absence and also removes the qualifying period for parental leave and paternity leave, so these too can be taken by employees from the first day of employment. In addition, the Bill broadens the right of employees to take bereavement leave and extends existing protections from dismissal during pregnancy and for up to six months following the end of maternity leave.
Gender Equality Reporting
The Bill includes a requirement that organisations with two-hundred and fifty (250) or more employees publish an equality action plan every twelve (12) months. The plan should include steps that the employer is taking to advance equality and opportunity between male and female employees, including how they are addressing the gender pay gap and how they support employees going through menopause. Firms with two-hundred and fifty (250) employees should start reviewing their processes in this area before these obligations come into force.
Trades Union Recognition
Currently, a trade union has to demonstrate that it has membership of at least ten per cent (10%) of its proposed bargaining unit before making a formal request for recognition to the Central Arbitration Committee (CAC). The Bill gives power to the Secretary of State to reduce this percentage to as low as two per cent (2%). This change means that trade unions will find it easier to seek formal recognition in future.
Ensuring Compliance
The Employment Rights Bill 2024 represents the most significant change in UK employment law for almost twenty (20) years. Employers large and small must adapt to these coming changes to ensure compliance and support their workforce. The Motion Paradox team of start-up business and legal consultants, based in London and Los Angeles, can help you review and draft bespoke contracts of employment and HR legal guidelines that make sure your company is compliant with all the necessary regulations (whatever they may be) and whenever they may come into force.
